Author Topic: Increasing credit limit to optimize FICO score  (Read 5700 times)

link_417

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Increasing credit limit to optimize FICO score
« on: May 30, 2015, 12:47:34 AM »
My FICO score took a hit a few months ago, down to 766 from 779 at the beginning of the year.  I use my Discover Card to make zero-interest balance transfers in order to halve the interest rate on chunks of my student loan balances and I wanted another card to help with that, so I chose to get Discover It.  My first FICO decline was 9 points from opening the card (lowering my average credit account age) and I believe the second decline (4 points) was from the balance transfer to that new card (adding to the number of accounts with balances that I have).

I'm moving in July and will have my credit score checked by utilities companies to determine whether or not I pay a deposit or how much the deposit will be.  I don't even know if 13 points would make a difference, but I only have $1,000.00 saved for moving expenses (I'm moving to another apartment in town that's not very far away but will cut my commuting distance by 2/3) so I want my score to be as high as possible to limit paying too much in deposits.  I'm not sure what credit score will be checked but I figure increasing my available credit will positively affect all my scores due to decreasing my utilization rate, as long as it gets reported to the bureaus in time.  Though my current utilization is around 3-4% so I may have reached the point of diminishing returns with that route, but it can't hurt to try.

I don't know if this has been brought up in another topic but I wanted to share what I learned in case it can help someone else with their credit utilization rate.

Citi Credit Cards
Your Personal Finance Pro has an article about increasing your Citi credit card limit (http://yourpfpro.com/increase-citi-credit-card-limits/).  READ THE FINE PRINT.  The article gives examples of Citi cards that did not require a hard credit card pull but one Citi card did, and the author didn't realize he had missed the fine print until it was too late.  When I went to the website (https://www.accountonline.citibank.com/cards/svc/LoginGet.do?NEXT_SCREEN=/ICLI&siteId=CB), it stated they would not pull my credit file and I ended up getting a $2,000.00 increase to my credit limit.

Discover Credit Cards
After you log in to your Discover account online, go to the 'Account' tab at the top and select 'Credit Line Increase.'  The next screen will ask for your gross annual income, employer name, and monthly housing payment.  There is a statement that they may need to do a hard pull on your credit report, but they will give you a warning if that's the case and then won't process the application without your consent.  Both my Discover Card and Discover It Card were increased without a hard pull:  +$1,000.00 for Discover and +$2,500.00 for Discover It.  Also, there is a sliding scale on the approval screen in case you want to lower the amount of the increase.

Naturally, my credit card spending remains the same whenever my limits increase and I only transfer about $600.00 at a time from my student loans; otherwise, increasing the limits would do nothing to help my utilization rate.  I pay all my credit card balances in full each month (except the balance transfers).

Anyone know about other credit cards/credit card companies that offer credit limit increases with only soft pulls?

« Last Edit: May 30, 2015, 12:52:18 AM by link_417 »

link_417

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Re: Increasing credit limit to optimize FICO score
« Reply #1 on: May 30, 2015, 10:57:13 AM »
LOL, I wouldn't call it 'obsessing,' but thanks for the info :)  That's definitely reassuring, I appreciate it.

Goldielocks

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Re: Increasing credit limit to optimize FICO score
« Reply #2 on: May 30, 2015, 11:19:53 AM »
Your score is fine.

I only had problems when I had ZERO or no score. (No history)

Paul der Krake

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Re: Increasing credit limit to optimize FICO score
« Reply #3 on: May 30, 2015, 11:28:24 AM »
Raising the score should only be a concern when it's not great: anything above 700 is subject to the law of diminishing returns. Trying to go from 750 to 780 or whatever gets you bragging rights on the credit forums such as myfico.com is an incredible waste of time.

Utility companies don't care one bit about your credit utilization or other imagined prime borrower problems: they only look out for people who only pay their bills every other month and greet the meter guy with a shotgun.

link_417

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Re: Increasing credit limit to optimize FICO score
« Reply #4 on: May 30, 2015, 11:49:31 AM »
Your score is fine.

I only had problems when I had ZERO or no score. (No history)

That's good to know, thanks!  I thought $1,000.00 would be enough to cover moving expenses but then I started reading about utility deposits (I've only had one apartment before -- my current place -- and utilities were included in rent) and began to discreetly shit my pants.

Raising the score should only be a concern when it's not great: anything above 700 is subject to the law of diminishing returns. Trying to go from 750 to 780 or whatever gets you bragging rights on the credit forums such as myfico.com is an incredible waste of time.

Utility companies don't care one bit about your credit utilization or other imagined prime borrower problems: they only look out for people who only pay their bills every other month and greet the meter guy with a shotgun.

LOL, thanks!  I didn't worry about my score (I'm not buying another car until this one dies its final death and I won't be buying a home anytime soon as I'm not sure I want to stay in this town) until I decided to move and found out people would be checking it, though I did read that the leasing manager will only look for negative items and not my actual score.  Good to know that's the case for utilities, too.

kpd905

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Re: Increasing credit limit to optimize FICO score
« Reply #5 on: May 30, 2015, 12:07:49 PM »
Having a score over 760 gets you the best rates on mortgages, so anything over that doesn't really matter anymore.  Unless you use it to churn credit cards, then it is always better to have a high score so you can get more cards.

Vorpal

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Re: Increasing credit limit to optimize FICO score
« Reply #6 on: May 30, 2015, 03:09:25 PM »
I've not found any discernible rhyme or reason to minor fluctuations in credit score. They're based on algorithms, but the inputs are so varied that I'm not sure you can accurately predict what effects small changes will have, either positive or negative. A couple of months ago, Discover reported my score as 835 (brag time!), and I was really stoked and hoping I could "max it out" at 850 (because "achievement unlocked!"). Then it dropped to 825 or so the next month, I didn't do anything that I would expect to set it off. No credit inquiries, I charged (and paid off) about the same amount as I do every month, no major changes in bank balances, etc. After that I gave up caring about small movements. If I don't how to win the game, I'm not playing :)
« Last Edit: May 30, 2015, 03:11:23 PM by Winston »

forummm

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Re: Increasing credit limit to optimize FICO score
« Reply #7 on: May 30, 2015, 06:38:24 PM »
760+ is a great score. No utility will give you trouble over that. Just keep your great credit behavior and your score will go up over time.